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2018 Offshore Technology Yearbook

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4 | December 2017 | hartenergy.com 2018 OFFSHORE TECHNOLOGY YEARBOOK | PRODUCTION OUTLOOK North America About 83% (1.43 MMbbl/d) of the oil production in North America (U.S. and Canada) was pro- duced from the U.S. GoM in the past fi ve years. Canada offshore production from east Canada only accounts for about 12% (200 Mbbl/d) of the region's total (Figure 3). Deepwater lower tertiary fi elds have been the major driving force of growth in the GoM, in part due to high oil prices before 2014. These prices helped spur technological breakthroughs in ultradeep reservoir development. As prices begin to increase to what might be considered a sustained level, big discoveries in deep water will once again become the focal point of portfolio optimizations. With operators in the GoM cutting investment in the last couple of years, new projects were pushed off their schedules. Only a few small projects were sched- uled to come onstream in 2017. BP's Thunder Horse South Expansion project is one of the larger ones with a peak production about 30 Mbbl/d. However, U.S. GoM oil production is expected to top 1,700 Mbbl/d and maintain the same level over 2018, as several major projects starting on or before 2016 ramp up their production. Looking forward, the new project start drought will continue beyond 2017. Only four major new source projects are expected to start production in the three years from 2018 to the end of the decade. Hess' Stam- pede project, which was sanctioned in 2014 and is now under construction, is scheduled to start production in 2018. Chevron's Big Foot project has postponed its start date from 2015 to 2018 due to a tendons failure during the platform installation. BP's Atlantis East Phase 3 is expected to start by 2020 as a subsea tieback development. Shell's Appomattox project was sanc- tioned in 2015 and is in the construction stage with an expected production startup by 2020. As base production continues to decline, new source projects start to lose steam. The industry will see GoM oil production decline in 2018 and reach the bottom in 2020 at about 1,560 Mbbl/d, a 170 Mbbl/d drop compared to the high-production level of 2017. Assuming an oil price recovery, develop- ments of lower tertiary discoveries should help pro- duction within the deepwater and ultradeepwater segments pick up again in 2021. Latin America About 50% (4.7 MMbbl/d) of Latin America oil was produced from offshore fi elds over the past fi ve years. Brazil and Mexico have been the two main producers in the region (Figure 4) with a combined production of about 4 MMbbl/d. This volume rep- resents about 85% of the region's total offshore oil output. About three-quarters of the offshore pro- duction is from shallow water, contributed mostly from the southern portion of the GoM. Over the next 10 years, as shallow-water pro- duction in both Mexico and Brazil decline, presalt developments in ultradeepwater Brazil will pick up the momentum and drive the region's produc- tion growth. Production is expected to reach 6.1 MMbbl/d by 2025. Presalt oil production in Brazil will continue to grow in the near to medium term. Production is expected to reach 2.3 MMbbl/d on average by the FIGURE 4. Latin America Offshore Oil Production by Country 0 1000 2000 3000 4000 5000 6000 7000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 MBbl/d BRAZIL MEXICO VENEZUELA REST OF LATIN AMERICA FIGURE 3. North America Offshore Oil Production by Country 0 500 1000 1500 2000 2500 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 MBbl/d CANADA USA

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